You Can Retire Early


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Retire SunsetHow do you think about retirement? Is it something that’s too far off to worry about, or too close to deal with? Is retirement something you feel ready for or scared about? Do you want to retire early or will you have to work longer than you want?

In yesterday’s post I wanted to turn the cliché “Money is the root of all evil” on its head and I came up with some suggestions such as money is the root of self-confidence, independence, and security. The fact is, money is a means to an end, it’s just a tool to use.

Retirement is thought of as an escape from work, from responsibilities, from the rat race or the grind, but retirement is none of those things if you are ill prepared without enough resources, otherwise known as money.

I know that early retirement will be a reality for me (whatever retirement means for someone who asks What Next). But what is early retirement? If 65 is “normal” retirement is 60 early? How about 55 or 50? My goal is 50 but is that really possible? And how?

The answer is yes it’s possible and I present “Super Saver” as exhibit A. Super is a blogger who retired in his 40s and, as I indicated yesterday, he didn’t use any get rich quick schemes, there were no tricks, and he doesn’t have a system he’s selling to teach you how to do it.

There are three key points to how Super retired so early and how I plan on doing the same: First, he started young and got a good education in a field with potential for good income. Not every career has the same potential for high income but you have to accept that fact if you choose to take a job because you love what you do rather than for the money. As a student you should also think twice about how much debt you’re willing to take on for a job that doesn’t pay well.

Second, he knew that hard work in the short term would lead to options in the long term, he was able to advance in his career getting raises and promotions along the way. I, too, have worked long hours and pushed hard to achieve certain goals at work but I know I won’t be doing this forever.

Third and probably most important, he was able to restrain himself and live significantly below his means. No matter how many times people hear this advice, live below your means, they simply don’t listen. Yes my wife and I have a very good income but we also save a large amount. Super says he saved 10% of his income in the early years but I don’t see how much he saved later. Julie and I save an astonishing 27.7% of our income, on average, over the last 6 years.

Wealth Builder PostsSuper wrote an excellent series of posts recounting exactly how he was able to retire in his 40s and I highly recommend reading all 10 posts.


So many people ask, wonder, and dream of retiring early without realizing that they have the resources to do it if only they were willing to give up some immediate pleasures for the future promise of their dreams.

It comes down to choices. Do you have what it takes to make the right choices now for a better future?

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Money Is The Root Of…

I’ve said before that I don’t like clichés and I’m not alone. My friends Jen @gingerconsult and Monika @healingmuse share that feeling. Monika lamented that so many people use clichés on Twitter and I replied with my agreement.

Twitter quote 1

It reminded me of a post Jen wrote on the subject and I tweeted that to Monika.

Twitter quote 2

This is yet another example of the interaction available on twitter (I’ve written about that too).

But this post isn’t really about clichés, it’s about money. There are lots of clichés when it comes to money and while clichés have some truth to them they are often incomplete. A perfect example of this is the statement “money is the root of all evil.” It’s true that money, the desire for money, the greed associated with money, leads people to do bad things but money is also the root of self-confidence, independence, and security.

Another twitter friend @EmpowrdAmerican wrote a post about this very subject with this tweet announcing it.

While they admit that a lot of people think they would talk about politics with a name like Empowered American, they actually spend a lot of time on the subject of money. Though many people like to say money isn’t important, as my friends at Empowered American point out, “money opens the doors for opportunity.” You need not be greedy to want financial security, independence, nice things, and a certain level of comfort. With the popularity of so many financial experts such as Dave Ramsey or Suze Orman, I think there are a lot of people who agree.

While many people want the benefits of money, the security and independence, almost as many aren’t willing to make the choices necessary. The choices, the sacrifices, shouldn’t be difficult but so many of us make them difficult because we’re unwilling to forego instant gratification. Look at the cars people drive and how often they get new cars.

People also tend to wish for a big windfall rather than doing the work necessary for a steady progress toward wealth. That’s why so many people put their faith in things other than themselves like the lottery.

I’m planning on retiring very early (whatever retirement means from someone who asks What Next) and tomorrow I’m going to introduce you to someone who reached that goal. At the risk of you not reading the post, you won’t hear about any trick or full proof system, you’ll see that smart decisions and living below your means (not buying fancy cars and huge houses) can get you to the finish line much faster than you ever imagined.

So what is money to you? Fill in the blank in the comments area below “Money is the root of…” 


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Are You Crazy???

StraightjacketI’ve heard it said that the definition of insanity is doing the same thing twice and expecting a different outcome. I can add to that. My definition of insanity is knowing you’re on a road to nowhere and staying there. That is what 60% of US workers are doing. These are people who are not asking what next, who aren’t willing to take simple steps to secure their future.

I wish it were possible for you to hear me scream in a blog post. START TAKING RESPONSIBILITY FOR YOUR FUTURE. Apparently people are much too concerned with the present to think about the future. My post yesterday was about taking opportunity when it’s available but maybe you need me to be a little clearer. You’re an idiot. That’s right I just called you an idiot and, like the classy Governor of NJ, I’m standing by my statement.

Why am I so angry? A new report from the Employee Benefit Research Institute (EBRI) states that 60% of US workers have less than $25,000 in savings and investments. People talk about welfare recipients like they’re a drain on society, well wait till the fools who only have $25,000 saved toward retirement get too old to work!

Success comes when you take action now for a benefit in the future, but according to the study, “instead of saying I’m going to save more today, they just say I’m going to defer my retirement age once I get to 65.” Are you kidding me? Yeah, that’s a great plan, right up there with playing the lottery or praying for a million dollars.Lottery Ticket

The other number that is pathetic is that only 14% of the people surveyed feel very certain that they will have enough to live comfortably in retirement. But apparently 100% aren’t willing to do a damn thing about it. There is no way to escape the fact that you are the only one responsible for your future. 

The survey does not include the value of a person’s home – which is a good thing since a lot of these people, even so called experts, probably used their homes as ATMs contributing to the housing collapse. The other thing the survey doesn’t include is the value of any traditional pension plans the respondents may have. I say “may have” because most don’t know if they do. Although 56% expect to get a pension only 33% say they have one! Was I being to harsh with the name calling?

I do not include my pension or social security in my projections for retirement. If I’m not comfortable without that money then I’m not saving enough – boy am I in the minority here! According to the St. Louis Fed the personal savings rate for 2012 is 4.6% but compare that to my personal savings rate for 2011 of, brace yourself, 32%.

I’ll admit it’s easier to get the savings rate up when your basic necessities are met but it goes far beyond that. I could easily afford an iPhone or iPad or both but I didn’t buy those because they are not a necessity. I could have an HDTV in my bedroom but I rarely watch television there and that would increase the cost of my Direct TV service. These are the choices we make in order to get up to that high savings rate and it is the reason we are so far off the charts in our savings and investments and why we have so many options.

Are you asking what next or are you coasting? With the steep incline of retirement looming, coasting won’t take you very far. What are you doing to plan for the future?


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Free time isn’t Free

Since my vacation has ended the thought of how much free time I have (and want to have) once again comes to the fore. After being able to do anything I want whenever I want, I would prefer to have as much free time as possible. But like anything else, is too much of a good thing actually bad?

In a blog post on psychology today Dr. Robert Puff wonders if having more free time makes a person happier. At this moment I will anser with a resounding yes! but that’s right now. Would I still say that after a month of free time, a month of no obligations? How about a year or more, otherwise known as retirement.

While Dr. Puff sites a study that explores the link between free time and material possessions, the fact is that too much of anything is not good. Free time means you don’t heave anything in particular to do. Most people in retirement, however, fill their free time with activities that they often didn’t have time for when working because work almost always gets in the way of fun.

The definition of free time is also at issue. I mean, is it free time if you have activities planned? The problem arises when you don’t have things planned which, in the study cited in the article above, led to compulsive buying which led to more things but less happiness (buyer’s remorse comes to mind).

One reason early retirement is often difficult on people is that they don’t have peers to share the free time with. It’s totally up to them to fill the free time and without solitary activities it’s hard. I enjoy solitary activities such as hiking and bicycling so I’m confident I’ll have things to fill my time. I also have a companion, Julie, my wife, who enjoys a lot of the same things I do, so again I’m confident I’ll do fine with free time. The problem really rears it’s ugly head when I realize that in order to afford all that free time I have to work really hard now. Free time is really expensive.

If youth is wasted on the young, as the saying goes, then retirement is wasted on the old!

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What does coasting mean to you?

Girl describes coasting as “Being in a point of total relaxation, when everything seems to be going your way.” Be careful of the word – seems. Using “seems” indicates only the appearance or the impression that everything is going your way, but it might not.

I’m not a fan of coasting in life as I’m sure you can imagine based on the title of my book, What Next. Asking What Next is the opposite of coasting. In the chapter called, appropriately enough, Coasting, I present my case. The quote I start the chapter with succinctly captures my problem with the word “if you are coasting you’re either loosing momentum or you’re heading down hill.”

While everything might seem like it’s going your way, coasting only lasts so long, then the twin effects of friction and incline take their toll as your momentum is reduced. This doesn’t mean you have to keep the pedal to the floor at all times, you can and should let up, but it means that too many people haven’t used the gas in a long time.

Friction is barely noticeable as you coast through life. Maybe your savings is reduced bit by bit, hardly enough to make a difference right? Maybe your retirement savings aren’t as big as they could be, but that’s a long way off. Maybe your relationship with a spouse or partner is becoming mundane but you love each other so it’s all right.

Then bam, a hill appears out of nowhere and coasting isn’t enough any more. You lose a job, your investments take a nose dive, or your relationship takes an unexpected turn. Building up the momentum to get over the hill won’t be easy as the effects of the friction become painfully apparent.

Are you coasting? Is that a problem?

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